By
Josh O'Sullivan
April 30th, 2024
In its new report, KPMG also explains different ways to further reduce the environmental impact of Bitcoin mining.
KPMG, the Big-4 consulting giant, has recently released a new report highlighting the environmental impact of Bitcoin mining. In their 12-page report, KPMG noted that Bitcoin mining activities can accommodate within the new guidelines of environmentally friendly investing (ESG, or Environmental, Social, and Corporate Governance).
ESG criteria are essential for responsible investing. Also, ESG corporate reporting assesses risks and opportunities related to the environmental sustainability of production activities.
KPMG’s recently released report declares Bitcoin as a mature asset class, but despite its growing adoption, it remains misunderstood. The report aims to evaluate the actual environmental, social, and governance impact of this technology while debunking existing misconceptions.
It highlights high-impact use cases of Bitcoin that have demonstrated value for users and society. However, the analysis by KPMG primarily focuses on the environmental aspects of mining. KPMG notes that Bitcoin mining emissions when compared to other human activities, are relatively very low. This includes the comparison of emissions with other industries such as Gold, Tourism, and Fashion.
Bitcoin mining emits only 67 MtCO2e per year, much less than gold mining (100 MtCO2e). Compared to tourism (4,500 MtCO2e) and fashion (2,100 MtCO2e), Bitcoin’s emissions are minimal. Also, deforestation alone contributes over 1,000 MtCO2e. So, the focus should be on larger emissions sources, not just Bitcoin mining’s comparatively insignificant impact.
Further Reducing the Environmental Impact of Bitcoin Mining
In the report, KPMG suggests ways to lessen the impact on the environment from Bitcoin mining. One is to use renewable energy sources, like wind and solar power, which Texas already does. This has attracted many miners to Texas, making up 59% of the US’s total mining.
Bitcoin mining can also help balance power grids by reducing consumption during peak times, benefiting renewable energy producers. Another idea is for miners to reduce energy usage when energy is scarce, which they have already been doing.
The third idea involves recycling the waste heat produced during mining. By utilizing this heat, which is essentially free and wasted otherwise, it can replace the need for additional energy consumption to generate the same amount of heat through other means.
Miners in hot regions face the challenge of excess heat that needs to be dispersed, but those in colder places can benefit by reducing heating costs. The KPMG report notes:
“Bitcoin mining industry has become extremely competitive. Under this competitive landscape, miners are incentivized to streamline their operations and carefully manage production costs. As electricity is the largest ongoing input cost affecting operations, miners are constantly searching for the lowest cost sources of electricity, which is often tied to underutilized hydro, wind, or solar”.
Read other crypto news on Coinspeaker.